Avoiding Extraterrestrial Claim Jumping: Economic Development Policy for Space Exploration and Exploitation, in W

Reilly II, J. F., 2013, Avoiding extraterrestrial claim jumping: Economic development policy for space exploration and exploitation, in W. A. Ambrose, J. F. Reilly II, and D. C. Peters, eds., Energy resources for human settlement in the solar system and Earth’s future in space: AAPG 7 Memoir 101, p. 141–150. Avoiding Extraterrestrial Claim Jumping: Economic Development Policy for Space Exploration and Exploitation

James F. Reilly II American Public University System, 111 W. Congress St., Charles Town, West Virginia, 25414, U.S.A. (e-mail: [email protected])

ABSTRACT

ny frontier exploration effort transitions eventually to an exploitation phase. Exploitation can be research or economic in nature. In either case, A a regulatory framework is required to coordinate and govern any activity in the new realm. The Earth orbital regime has entered the exploitation phase with the advent of a permanent research facility in the form of the International Space Station (ISS) and increasing activity in the private sector. The lunar regime and perhaps near-Earth asteroids will be potentially entering the exploitation phase within the next two decades. A regulatory structure in the form of an international agreement using elements similar to the Antarctic Treaty and the Intergovernmental Agreement for the ISS may be used as an example of a potential regulatory structure for the exploitation of the extraterrestrial environment. Inevitably, economic development will follow the research phase if not specifically prohibited in any future treaties or agreements. To manage these activities, an organization similar to the World Trade Organization could form the basis of a management body for economic activities.

INTRODUCTION that we use everyday. The only real differences between this site and any other remote mining ‘‘This mining outpost owned by an interna- facility are the long daylight periods and what tional conglomerate runs three shifts every 24 h, seems like even longer nights. Days are, by most recovering unique materials from the soils and residents’ accounts, easier to handle as the bright ships them to facilities where they are processed light makes it easier to move around. The high and delivered to industries that use them to gen- temperatures during the solar noon, however, erate the energy and manufacture the products sometimes cause cooling systems to overheat. The

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nights do have their awe-inspiring aspects, how- under several regulatory schemes: enterprise-only ever, since the stars are too numerous to count governance, where corporate policies regulate opera- and, when lights are left off and by looking close- tions (essentially a laissez-faire environment); nation- ly, a miner can see colors in the dots of light not al legal frameworks, where corporations and other seen on earth...’’ (an excerpt from the TerraLuna entities are regulated by the laws of their home coun- Mining Confederation brochure, welcoming visi- try; or international agreement, where the interests tors to the Mare Procellarum mining facility). of the participating nations will be merged to form a regulatory regime to ideally provide a stable economic The above is obviously fiction, but someday, extra- climate for commercial activities. Each of these three terrestrial mining will be an industry actively pursued points in the regulatory spectrum will be briefly re- by corporate entities once economic critical mass, or viewed to define potential strengths and shortcomings when reserves and demand reach the point of com- in each of the different approaches. An attempt will mercial interest, is achieved. Although it may be a de- then be made to define an option providing the most cade or more away, as Harrison H. (Jack) Schmitt palatable regime for the future enterprises that will risk (2006) describes in his book Return to the Moon,the extensive sums to form the future industries while rec- pressure for exploitation of assets, both mineralogical ognizing the regulatory interests of the public sector. and potentially biological, on near-Earth bodies will Multinational agreements, most commonly those ultimately be inevitable. As in recent low Earth orbit driven by the political sector, commonly retain po- exploration projects, like the International Space Sta- litical risk in the form of common-heritage-of- tion (ISS) and numerous communications and resource mankind clauses that effectively impede develop- monitoring satellites and systems, extra-terrestrial asset ment. In effect, the inclusion of commons language exploitation, when it occurs, will likely not be a single may be thought of as the distribution of any realized nation’s effort but one of a transnational or truly inter- benefits to the broader community of humankind national entity. The future business may be totally com- without regard to the participation of any commu- mercial or may be a hybrid government-commercial nity in the development of the enterprise. Benefits enterprise. In either case, political considerations that transferred to those who have not provided capital will be unavoidable will exist. An agreement between in one form or another in the form of investment (or political entities will need to exist to allow the devel- skininthegame)intheenterpriseisanotherway opment of equitable relationships by the transnational of describing this condition. This has been a major economic entities and the protection of investment and impediment to ratification of the United Nations production by regulation that will allow a legally clear Convention on the Law of the Sea (UNCLOS) Treaty and clean process for exploitation of future resources. by the United States primarily because of the lack of By negotiating the terms of an international agree- commercial protections for a return on investment ment and the regulating structure now, an equita- and the lack of adequate protections on the intel- ble and flexible framework may be developed under lectual property (IP) developed as part of any exploi- which any and all signatories will be involved in the tation program. Unless an organization or country governing process before economic and political decides to proceed in an enterprise, ignoring these pressures arise to make the task more difficult. What conditions on the assumption that they are ulti- form could this agreement take and what might mately unenforceable, the inclusion of the com- work effectively as a regulatory body in this new en- mons language in the Law of the Sea Treaty will still vironment? This chapter will present a possible for- need to be addressed before any commercial activity mat for an international agreement using aspects of may proceed. the successfully implemented agreements governing A concept of shared risks, shared rewards exists Antarctic operations and the ISS as a guideline for a in almost every commercial mining and/or extrac- space exploration and exploitation instrument and for tion enterprise. Hydrocarbon exploration agree- proposing an international governing body using the ments routinely exist between regulatory agencies Worl Trade Organization (WTO) as a model. of the respective governments owning the license areas and industry partners that are commonly multi- REGULATORY FRAMEWORK national in origin. This works well when the regulating agency (owning government) owns the rights and Exploration and exploitation of the Moon and licensing authority to the resource area. What hap- ultimately other celestial destinations may operate pens when that ownership is unresolved as in the Avoiding Extraterrestrial Claim Jumping / 143 case of international waters for mineral extraction economic zones (EEZ). However, in the case of the or in the case of resources in the space regime? Where Moon and other celestial bodies, any such ownership does the regulatory authority come from and who or territorial claim is specifically rejected within the delegates that authority to that entity? Outer Space Treaty. However, where national juris- Early stages of exploration leading to exploitation diction is extended into the stateless regimes, then may conceivably be conducted unilaterally by any national-level regulations have characteristically cov- enterprise. However, in any completely open market ered operations. Examples are the national research space, ownership of the assets will eventually become stations in Antarctica (Figure 1) and those within a critical governance issue requiring regulation. As an the national assets of the ISS (Figure 2). In the case of example, as satellite telecommunications demand in- the United States stations in Antarctica, United States creased, the slots for satellite positioning in the geo- law is extended for both civil and criminal matters. stationary orbit plane (GEO) became a critical asset Aboard the ISS, United States law extends to the issue. In response to the pressure of avoiding not only modules operated by the United States. However, in physical, but also radio frequency interference be- the case of the ISS, the United States legal extensions tween GEO communication satellites, the Interna- generally do not extend into the other key compo- tional Telecommunication Union (ITU), originally nents of the station owned and operated by other formed in 1865 to provide a common set of rules for countries. In this case, a separate supranational agree- telegraphy across national borders, became empow- ment was made between all participating parties to ered to organize and regulate the GEO slots as a mem- manage the joint efforts to build and operate the on- ber agency of the United Nations (International Tele- orbit laboratory. In the case of the Antarctic Treaty, communication Union, 2010). Slots for GEO birds where a similar international regime exists within an are now controlled by the ITU and issued to member area where ownership is not expressed, the United countries, including those with little or no likelihood States commercial interests have been limited by a of establishing their own satellites in orbit. These as- legislative ban on capital activities by United States signments do not provide each country with satel- nationals. Other nations are not so burdened and will lite technology but, essentially, with real estate that benefit disproportionately whenever the economic gives each licensed country the opportunity to es- critical mass is reached for Antarctic mineral exploi- tablishitsownassetsintheGEObeltortosellor tation. This will be a separate form of political risk to lease the rights to another entity. The advantage here avoid within the space regime. is to allow the ultimate licensee the freedom and Commercial activities in stateless or transnational protections to invest in and exploit the asset, in this areas have, in the past, been held as a common law case, the communication capability that is the mar- (e.g., freedom of navigation on the open seas) or pri- ketable product. This does not reduce the potential marily treaty or protocol agreements. Examples of for misdeeds, such as intentional interference by a multinational regulatory agreements are the Antarctic competing agent, but the ITU does form an avenue Treaty, UNCLOS, and the Kyoto Protocol. The Kyoto for a redress of grievances and potential regulatory Protocol will not be examined here because it is gen- action to correct the conflict. Without some form of erally not related to regulating activities in stateless re- regulation, as in this case where the ITU licenses and gions but focuses on the environmental conditions provides deconfliction for the GEO communication influenced by activities within sovereign nations. The satellites, claims and counterclaims will generate the Antarctic Treaty and the Law of the Sea Treaty, how- inevitable legal entanglements that may preclude ever, were each designed to provide an international the development of a viable industry. In the worst framework for cooperation and regulation in the phys- case, claim jumping by those nations and commer- ical regions of Earth where no sovereign presence ex- cial interests uninhibited by a desire to seek cooper- ists. They both either regulate or impact commercial ation is likely to lead to significant conflict once activities and will be briefly summarized. economic thresholds are reached. Regulation at the state level may form a suitable THE ANTARCTIC TREATY OF 1959 legal environment should that nation own or man- AMENDED IN 1991 age the resource or real estate, as in the deep-water hydrocarbons exploration and production operations Antarctica, as the last frontier of the 20th cen- within what have classically been recognized as in- tury, has been seen as a potential storehouse of min- ternational waters but are now recognized as exclusive erals from hydrocarbons to metals. Numerous claims 144 / Reilly

FIGURE 1. Antarctica, illustrat- ing the locations of current and past stations and regions claimed by countries (credit: Central Intelligence Agency, 2009).

to Antarctic territory have been made based on early nent bases on the continent by many of the countries sightings by mariners, extensions of national borders, sponsoring early efforts. The first permanent research and others but not because of habitation because presence was opened in the Antarctic during the 1959 no permanent human residents of Antarctica exist. International Geophysical Year. These first perma- Although no permanent residents exist, human pres- nently occupied research stations have, over the last ence claimed by the early pioneering exploration 50 years, grown to be a series of permanent stations on efforts on the continent could potentially bear on thecontinentwhereabroadrangeofinvestiga- ownership claims on resources. During the heroic tions are conducted (Figure 1). From these bases, age of Antarctic exploration that occurred in the widespread, detailed exploration efforts have been first two decades of the 20th century, exploration quartered and launched. teams who landed on the Antarctic landmass briefly With the lack of clarity regarding jurisdiction explored the environs and then departed without over future competing claims on potentially eco- leaving a permanent station in place. These efforts nomic reserves of mineral resources, the interna- were dominated by a small number of countries that tional community recognized that some form of could potentially make claims to significant regions of agreement was necessary to provide a regulatory the continent based on an interpretation of the first framework to govern operations on the continent. use concept where ownership of a resource (e.g., The United States negotiated the Antarctic Treaty water in Texas) is conferred by the first use of that of 1959 with an original group of 12 signatories that resource, in this case, any activity requiring the use contained all the major participants and claimants of indigenous materials. Following a gap of approx- presently having or had activities in Antarctica. imately 45 years, the second phase of exploration re- Subsequently, additional countries have signed on sulted in the placement of semipermanent to perma- to the treaty, resulting in a total of 48 signatories Avoiding Extraterrestrial Claim Jumping / 145

ploitation on the continent and surrounding seas to preserve the region as a pristine research laboratory. Over the past five decades, international cooperation in Antarctica has resulted in groundbreaking research in the fields of biology, meteorology, atmo- spheric sciences, marine sciences, glaciology, chem- istry, geology, geophysics, astronomy, climatology and, certainly, human behavior, to name just a few of the fields that have benefited from the presence of this unique terrestrial laboratory. Without this undis- turbed terrain to work within, many of the research pursuits could not have been undertaken. Ultimately, however, as raw materials demand expands, econom- FIGURE 2. The International Space Station at an assembly ic considerations will result in exploration and ex- complete in June 2011. From the Earth-nadir (lower part in the photograph) position, the components reflect ploitation efforts being undertaken in Antarctica and the European Space Agency (ESA) Automated Transfer a new round of negotiations will be required to gov- Vehicle cargo vehicle docked to the Russian Zvezda ern the efforts of the international compacts. service module, the Zarya module, United States Node 1 Within the 14 articles of the treaty, the follow- Unity, United States laboratory Destiny, and United States ing bear on the question of lunar exploration and Node 2 Harmony connecting the Japanese laboratory exploitation: Kibo and the ESA laboratory Columbus. The space shuttle Atlantis is docked at the top of the image. Each of these modules are governed by agreements with the host Article 1: Antarctica shall be used for peaceful countries and agencies (photo courtesy of National purposes only. Aeronautics and Space Administration). Article 4: All national claims are held static from the date of signature. No future activity of any country during the life of the treaty can affect today (Scientific Committee on Antarctic Research, the status quo on any rights or claims to terri- 2010). torial sovereignty. Two basic levels of membership of the Antarctic Article 10: Contracting parties shall ensure that Treaty are observed: full consultative parties, na- no activity contrary to the treaty is carried out. tions that are engaged in substantial scientific re- Article 11: Any disputes between contracting search activity, and nonconsultative parties, which, parties shall be resolved by peaceful negotiation, although not conducting any substantial research, in the last resort, by the International Court of agree to ratify and abide by the terms of the treaty. Justice. The 48 countries that have become parties to the An- tarctic Treaty represent more than 80% of the pop- The Antarctic Treaty currently in force restricts ulation of the world, including, incidentally, all coun- the activities of the signatories to research only dur- tries that currently have space-launch capability. The ing the period that the treaty is in force. Although consultative parties are the 12 original signatories: economic exploitation is prohibited for the term of Argentina, Australia, Belgium, Chile, France, Japan, the original and extended terms of the treaty, ulti- New Zealand, Norway, South Africa, Russia, United mately, it will prove to be impossible to expect the Kingdom, and the United States, plus Brazil, Bulgaria, moratorium on economic exploitation to remain in- China, Ecuador, Finland, Germany, India, Italy, Neth- definitely, so a revised commercial form of the treaty erlands, Poland, Peru, South Korea, Spain, Sweden, will have to be negotiated. An early attempt to regu- Ukraine, and Uruguay. The additional 20 nonconsul- late Antarctic mineral resources in 1988 was unsuc- tative parties are Austria, Belarus, Canada, Colombia, cessful (Secretariat of the Antarctic Treaty, 2010). Cuba, Czech Republic, Denmark, Estonia, Greece, Guatemala, Hungary, North Korea, Monaco, Papua UNITED NATIONS CONVENTION ON THE LAW New Guinea, Portugal, Romania, Slovak Republic, OF THE SEA Switzerland, Turkey, and Venezuela. In general, this agreement has held any claims by The UNCLOS established an International Seabed nations in abeyance and restricted commercial ex- Authority to govern activities in the pelagic regions 146 / Reilly outside of national EEZ. In addition to codifying the 2) Agreement on the Rescue of Astronauts, the Re- generally accepted principals of freedom of naviga- turn of Astronauts, and the Return of Objects tion, the UNCLOS also contains regulations govern- Launched into Outer Space of 1968 (commonly ing economic exploitation activities (United Nations, known as the Rescue Agreement); 2011). Although many countries have ratified the 3) The Convention on International Liability for agreement, the United States and other major in- Damage Caused by Space Objects of 1972 (com- dustrial countries have not ratified the agreement monly known as the Liability Convention); because of onerous regulatory requirements on the 4) Convention on Registration of Objects Launched distribution of benefits and the protection of intel- into Outer Space of 1975 (commonly known as lectual property. These requirements, or conditions, the Registration Convention); and include a requirement to deliver proceeds of output 5) Agreement Governing the Activities of States to nonparticipating countries under the common- on the Moon and other Celestial Bodies of 1979 heritage-of-mankind principle and no protections (commonly known as the Moon Agreement). on IP covering the techniques and technologies were used. With these two conditions, a free market en- Of these agreements, only two of them directly, terprise would be facing an uncertain economic en- or mostly, refer to or apply governing conditions on vironment and, with no protection for proprietary the activities of governments and, by extension, com- tools and techniques, would abruptly lose any in- mercial entities, those being the Outer Space Treaty dustrial advantage. This uncertainty, coupled with of 1967 and the Moon Agreement of 1979. the high entry costs to exploit the deep-marine min- The founding document in space law is the Outer erals, has, to date, inhibited the formation of an in- Space Treaty of 1967 where several provisions define dustry to mine the deep ocean. In effect, provisions of the functions and responsibilities of nations and the law delivered benefits (output) from any enter- nongovernmental entities in the exploration and prise risking the significant capital outlays to non- exploitation of the outer space environment. Article participating parties (nations) that had no skin in 1 states that ‘‘the exploration and use of outer space, the game. the Moon, and other celestial bodies will be carried Obviously, a hybrid solution needs to be reached out for the benefit and in the interests of all coun- where the economic interests of any commercial en- tries, irrespective of their degree of economic or terprise are recognized, protected, and regulated with- scientific development, and shall be the province in an international legal framework. of all mankind’’ (United Nations, 2002, p. 4). Com- mercial activities in Earth orbit have demonstrated LEGAL FRAMEWORK GOVERNING OUTER that this does not limit economic activities, nor im- SPACE ACTIVITIES pose undue restrictions on asset and capital protection and distributions. Article 2 dictates that outer Although a significant body of space law current- space, including other celestial bodies, is not subject ly exists, it has primarily been focused on the near- to claims of sovereignty, thereby limiting property Earth regime, with little that could be described as ownership by any state. Activities will be conducted comprehensively governing potential mineral or bio- in the interest of peace and international coopera- logical exploitation in the extraterrestrial regime. tion, according to Article 3. In Article 6, each country Those few efforts extending beyond the Earth or- is deemed to be responsible for its national activities bital environs have been well summarized by Schmitt in outer space regardless of whether they are con- (2006) and can be found in their entirety in the ducted by governmental or nongovernmental agen- United Nations Office for Outer Space Affairs docu- cies. The treaty further provides under Article 6 that ment, publication ST/SPACE/51 (United Nations, the appropriate state, or the government of that 2009), and will only briefly be discussed here. They country, is required to authorize and maintain con- are as follows: tinuing supervision of the activities of nongovernmental entities, generally understood to include pri- 1) Treaty on Principles Governing the Activities of vate and commercial entities. When activities are States in the Exploration and Use of Outer Space, international, then responsibilities and supervisory including the Moon and other Celestial Bodies authority are shared by the participating state parties of 1967 (commonly known as the Outer Space and the organization itself (see the Intergovern- Treaty); mental Agreement [IGA] governing ISS operations). Avoiding Extraterrestrial Claim Jumping / 147

Article 8 governs the ownership, jurisdiction, and economic development must result in economic re- control over any space object launched under the ward to the developers, whether they are national, auspices of any state and that object remains the international, or commercial entities. Without major property of that state regardless of location. In sum- changes, this document will never suffice as a govern- mary, the Outer Space Treaty would limit ownership ing document for future extraterrestrial activities. of any real property in space but does not preclude commercial activities. Furthermore, any equipment launched by any state (or international organiza- THE INTERNATIONAL SPACE tion) remains the property of the state or organiza- STATION FRAMEWORK tion whether in space, on the Moon, or on any other celestial body. The ISS (Figure 2) is governed by the Agreement The Agreement Governing the Activities of States among the Government of Canada, Governments on the Moon and Other Celestial Bodies of 1979, or of the Member States of the European Space Agency, the Moon Agreement, attempted to explicitly legis- the Government of Japan, the Government of the late any exploratory and exploitation activities of Russian Federation, and the Government of the space-faring nations. Only 11 countries have ratified United States of America Concerning the Cooper- the Moon Agreement: Austria, Australia, Belgium, ation on the Civil International Space Station (Na- Chile, Kazakhstan, Mexico, Morocco, Netherlands, tional Aeronautics and Space Administration, 1998), Pakistan, Philippines, and Uruguay. Five other coun- more popularly known as the ISS IGA. The original tries have signed but not ratified the treaty: France, agreement was signed in 1988 and the current agree- Guatemala, India, Peru, and Romania. None of the ment was signed in 1998 by the 14 countries par- major space powers have been party to this agree- ticipating in the construction and operation of the ment primarily because of its ambiguity regarding ISS: United States, Canada, Japan, Russia, and the potential future activities, commercial ownership of member states of the European Space Agency (ESA)— recovered resources, and regulation of operations. Belgium, Denmark, France, Germany, Italy, Neth- Similar to the Outer Space Treaty, the Moon Agree- erlands, Norway, Spain, Sweden, and Switzerland ment in Article 4 states that the use of celestial bodies (Moenter, 1999). In addition, Memoranda of Under- ‘‘shall be carried out for the benefit and in the in- standing between the participating space agencies terest of all countries, irrespective of the degree of exist: National Aeronautics and Space Administra- economic or scientific development’’ and that ‘‘due tion, Canadian Space Agency, Russian Space Agency regard shall be paid to the interest of present and (Roscosmos), ESA, and the Japan Aerospace Explo- future generations as well as to the need to promote ration Agency. The ownership of operations is gov- higher standards of living’’ (United Nations, 2002, erned by the assignment of utilization rights based p. 28). In Article 11, paragraphs 1 and 5, the Agree- on their respective shares of investment in the ISS ment further states that ‘‘the Moon and its natural facility. To simplify the technical and financial bal- resourcesarethecommonheritageofmankind’’ ancing, no exchanges of funds occur. Utilization rights and any exploitation of resources shall be governed and accommodations are bartered between the par- by an ‘‘international regime’’ (United Nations, 2002, ties by the use of multilateral agreements. Negotiations p. 31–32). In paragraph 7 (d), the ‘‘special needs’’ of among the partners do not occur at the governmen- the developing countries shall be given ‘‘special con- tal level but, characteristically, at the agency level. sideration,’’ with the interests of the parties having One important factor in the ISS agreements not contributed directly or indirectly in the explora- addressed in the previous treaties is the protection of tion of the Moon. As Jack Schmitt points out in IP. In the ISS agreement structure, intellectual prop- chapter 12 of Return to the Moon (2006), this echoes erty is protected based on the ownership of the lab- the redistribution language of the Law of the Sea Con- oratory element in which the invention occurred (Ar- vention of 1982. In its current form, this agreement ticle 21 of the IGA). In other words, if an invention suffers from an apparent political objective of global were to occur in the United States laboratory, the distribution of any potential output without regard country of invention would be the United States. to the corresponding expenditure of effort or capital However, patents on the invention can be filed in any by the national or commercial sponsor of the future country; this condition is only to define the location commercial enterprise. It will likely remain unrati- of the invention for which IP protections may be fied by the major space powers because any future asserted. However, inventors must have contractual 148 / Reilly arrangements with their respective agencies to support these assertions and to delineate the future exploitation rights for any inventions. In the ISS environment, there will be little in the way of resources to exploit. The primary output of ISS research activities is in the form of intellectual services. However, the ISS offers a business model for an international construct where access to the resources, in this case, the laboratories and crew time to deliver experimental results, is linked with the respective shares of investment of the parties. Although real estate, per se, does not exist on the ISS, the owning parties, for example, Japan for the Kibo module, hold jurisdiction over that environment. This could be an important distinction for future resource facilities on the Moon or other celestial bodies in the future. Opportunities exist in commercial research in methods, materials, and processes aboard the ISS. The ISS will likely never become a manufacturing facility but follow-on vehicles may certainly be de- FIGURE 3. Astronaut Harrison (Jack) Schmitt, Apollo 17, ployed to provide micro-g environments for the on the surface of the Moon in the Taurus-Littrow region during the heroic age of lunar exploration (photo courtesy manufacture of materials that would be impossible of National Aeronautics and Space Administration). to manufacture on Earth. Once high-value commod- ities are manufactured in space, the concept of ownership will be further cemented. derstanding (MOUs) at the agency and contractor level can be used to provide a management structure MODEL AGREEMENT FOR RESOURCE for the enterprise. Moreover, if the consortium was EXPLORATION AND MINING IN OUTER SPACE built with the participation of numerous governments, a cost-balancing scheme similar to the prin- In Return to the Moon (2006), Jack Schmitt (Figure 3) ciples outlined in the ISS multilateral agreements discusses the limitations to the existing multi- would balance investment against return in the same national agreements including the Moon Treaty, way that ISS research facilities and crew time are al- UNCLOS, and Antarctic Treaty. He concludes that located today. This is not very different from what none of the current treaties or conventions would Schmitt has proposed as consortia along the lines of suitably address the commercial interests in future Inmarsat and Intelsat but it does have the advantage lunar prospecting. He proposes a private enterprise of tying national, agency, and contractor functions approach to this effort along the lines of existing and interests together. consortia operating in the Earth orbital regime. How- The initial start-up expenses for any research sta- ever, to operate on the Moon and, eventually, Mars tion or resource exploration and/or extraction oper- without a clear regulatory structure would form a ation will likely be very large and risky to avoid significant limitation to capital investment in the government or, likely, international sponsorship of form of political risk and no clear title to assets ex- the construction and operation of the facilities. In tracted. To avoid this limitation, a structure similar this, it would be similar to ISS where no real claims to to the IGA governing ISS operations would allow real estate exist but output from the station has real commercial enterprises the regulatory structure to value. Contractors pay to have their payloads op- move forward. In terms of the facilities on the Moon erated on the ISS but they retain the commercial and and the ownership of the IP driving the techniques IP rights to their experiments. Oversight and opera- and tools, these would be protected under the prin- tions are defined in the IGA and MOU documents, ciples outlined in the existing Outer Space Treaty whereas the cost balancing and contract manage- and the ISS IGA. If a business model where a multi- ment are handled at the agency level. Distribution of national consortium operates the facilities, the ISS the proceeds, once an economic opportunity is re- IGA at the government level and Memoranda of Un- alized, would still need to be addressed. Avoiding Extraterrestrial Claim Jumping / 149

Once this economic potential is recognized, the mately, any potential Mars activities than the ITU entanglements of redistribution economics seen in model. In addition, the WTO has recognized the im- the UNCLOS and the Moon Treaty will need to be portance of protecting IP rights and has expanded the addressed. One option, similar to existing petro- functions of the Agreement on Trade-Related Aspects leum exploitation agreements within EEZ, would of Intellectual Property Rights attached to the Marra- be an investment-weighted royalty system. In this kesh Agreement Establishing the World Trade Orga- instance, the commercial entities pay a percentage nization signed in 1994. of the proceeds, in kind or in currency, into a reserve The members of the WTO operate within an agreed account. Distributions from this account will be de- legal framework where disputes are reviewed within livered to the participating countries based on their a multilateral system and findings, when necessary, investment factor. One way of determining the in- are issued to resolve the dispute. The WTO also man- vestment factor would be to calculate the total extra- ages the tariff conditions between countries so that terrestrial investment made by the enterprise, it acts as an arbiter within the marketplace as well. whether national or commercial, and measure that Furthermore, in the case of developing countries, the against the total investment in the project. If the en- WTO provides technical cooperation and technical terprise operated via governmental organizations or training, which meets the needs of expanding the agencies, then a further weighting could be applied opportunities and participation in the future enter- to balance rich-versus-poor national investments. prises by the nontraditional, if you will, countries. In this way, the investment factor could be further weighted by determining a ratio of investment against CONCLUSION the gross domestic product of that nation. To address potential disagreements, no suitable Future economic development of the lunar, and judicial organization that would act as an arbiter be- eventually Martian, resources will someday be inevi- tween the parties currently exists. In the UNCLOS, table (Figure 4). Currently, a significant regulatory a separate International Seabed Authority is charged need that is not being addressed with current laws, with regulating operations, managing resources, treaties, or organizations is observed. The Antarctic and settling disputes via a tribunal process. The ITU, Treaty can be used as an analog for developing an which handles satellite orbit assignments and man- agreement outlining the functions and responsibil- ages the radio frequency spectrum, does not have a ities of parties engaged in the second, or research, strong judicial arm and state-supported jamming of other satellites occurs with little recrimination or punitive actions. Without a strong judicial framework, any extraction or resource development activity will face potential conflicts between competing entities. An organization with regulatory as well as judicial authorities will be needed to manage resource allocation (e.g., mining leases) and to provide a strong judicial component to act in resolving disagreements. The World Trade Organization (WTO) may provide a model for such an organization.

THE WORLD TRADE ORGANIZATION MODEL

The WTO consists of 153 member states encom- passing more than 97% of the world population. The primary function of the WTO is to define the international legal and commercial ground rules that FIGURE 4. Conceptual lunar mining facility where juris- regulate trading policies between nations. It also pro- diction and ownership of produced resources will be vides a forum for dispute resolution between mem- defined by the future space exploitation policy modeled on the International Space Station (ISS) Intergovernmental ber states (World Trade Organization, 2011). In this, Agreement and Memoranda of Understanding between it is more relevant to future efforts at mining lunar the participating parties (courtesy of National Aeronautics resources, resource exploitation of asteroids, and, ulti- and Space Administration and artist Alan Smith). 150 / Reilly phase of lunar exploration where the scientific ob- International Telecommunication Union, 2010, ITU’s his- jectives will hold primacy, but it is not a perfect tory, in History of the ITU: http://www.itu.int (ac- extension to the third, or exploitation, phase. Even- cessed January 2012). Moenter, R., 1999, The International Space Station: Legal tually, resource development on the Moon and else- frameworkandcurrentstatus,SouthernMethodist where in the solar system will require an expansion School of Law: Journal of Air Law and Commerce, of the regulatory regime to meet the demands of v. 64, p. 1033. the commercial sector. With no clear ownership of National Aeronautics and Space Administration, 1998, Agree- the lands holding these resources, a new regulatory ment among the Government of Canada, Governments and judicial body will be required to support ex- of the Member States of the European Space Agency, ploration and exploitation operations. The ISS IGA the Government of Japan, the Government of the Rus- model may offer a legal framework where the states sian Federation, and the Government of the United States of America Concerning the Cooperation on the negotiate the terms of agreement for the programs, Civil International Space Station: http://www.nasa identify the requirements, and forge agreements with- .gov/mission_pages/station/structure/elements/nasa in the MOU process. Resource allocation and invest- _esa.html (accessed July 16, 2012). ment balancing are then accomplished at a multi- Schmitt, H., 2006, Return to the Moon: New York, Coper- lateral agency (or company) level. To manage the nicus Praxis, 345 p. resource environment and to resolve the inevitable Scientific Committee on Antarctic Research, 2010, The An- conflicts, an agency modeled on the WTO may pro- tarctic Treaty system: An introduction: http://www .scar.org (accessed November 2011). vide a set of both rules and techniques to manage Secretariat of the Antarctic Treaty, 2010, Key documents this new supranational regime. The WTO model of the Antarctic Treaty system, in The Antarctic Treaty: would also provide a means to resolve disputes with http://www.ats.aq/e/ats.htm (accessed November mandatory actions and recommendations binding 2011). to all parties. Finally, the Space WTO model entity United Nations, 2002, United Nations treaties and princi- would enforce the fiscal rules outlined in the IGA ples on outer space (ST/SPACE/11): New York, United regarding participation rights and allocations of re- Nations Office for Outer Space Affairs, 66 p. sources so that the political risk of redistribution United Nations, 2009, United Nations treaties and principles on outer space affairs, related general assembly economics that plague the UNCLOS and Moon agree- documents, and resolutions (ST/SPACE/51): New York, ments will not impede the extraterrestrial mining United Nations Office for Outer Space Affairs, 88 p. operations of the future. United Nations, 2011, United Nations Convention on the Law of the Sea, in Oceans and law of the sea: http REFERENCES CITED ://www.un.org/Depts/los/convention_agreements /convention_overview_convention.htm (accessed Central Intelligence Agency, 2009, Antarctica, in World November 2011). factbook: https://www.cia.gov/library/publications World Trade Organization, 2011, What is the WTO?, in /download/download-2009/index.html (accessed July About the WTO: http://www.wto.org (accessed Octo- 16, 2012). ber 2011).